Announcing the report “Possible evolutions of the voting system in Tezos”

Nomadic labs has an ongoing research relationship with Inria (a French national technology research agency).

In the context of this relationship, Nomadic Labs commissioned a short report to explore what a privacy-preserving amendment procedure might look like on Tezos, authored by three experts in voting protocols and cryptography: Véronique Cortier, Pierrick Gaudry and Stéphane Glondu.

There is no plan to implement the contents of the report for now, but we welcome and encourage feedback on its findings: from regular Tezos users, and from research and industry experts.

The report is here and we encourage you to leave comments below👇. Thank you.

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Allow non-baker to vote. The delegation process used for baking is not necessarily the same
as the one for voting. It is not because one trusts some entity to bake on one’s behalf, that one
trusts it for voting on an amendment of the protocol (that could for instance give advantages to
delegates).

This is the kind of egalitarianism in action that can destroy Tezos. Bakers are the ones risking their XTZ in bonds, they have the best intentions to vote objectively, in benefit of everyone. Allowing delegators to vote will only destroy the incentives to run a baker. Since bakers have to put their XTZ in bonds, they should be the ones in charge of voting. Why they would have to trust to entities that are not locking XTZ in bonds, sharing the risk? There is a mutual rational self-interest among bakers to vote rationally in order for their XTZ in bonds to not go to $0. Delegators can always sell when they want, their XTZ is liquid, ours is NOT. If anything, they are the ones that can make more irrational decisions since they don’t have to lock their XTZ. In that case, the delegators who wish to vote, should also lock their XTZ in bonds to share the risk with delegates.

Alternatively, they are free to associate with other delegators to form their own descentralized DAO baker, and this way they will be able to represent themselves in the on-chain governance, and also get the full rewards without fees been charged to them anymore. Managed by the Baker DAO. But they will have to lock their XTZ in bonds for that, there is no way to escape from this, we need to share the risk.

• Resistance to coercion. One of the reasons for which we require vote secrecy is to avoid coercion
and vote buying. However, in Tezos, vote buying is a somewhat built-in feature: it suffices to buy
more Tez to get more voting rights. Therefore, in the rest of the document we will not try to resist
to coercion and vote buying. We remark however that some solutions are present in the literature,
for instance the JCJ/Civitas voting system [5]. Adapting these techniques to the case of Tezos
where votes are weighted is not immediate. While it seems feasible, further research would be
required to design such a scheme and prove it secure.

A much easier way to make bakers to be resistant to vote buying, is to increase the collateral needed to run a bakery :man_shrugging:t2:. The more collateral bakers put in bonds at risk, the harder is for someone to buy their vote. Bakers won’t sacrifice their XTZ locked in bonds becoming illiquid, and not being able to sell, by making irrational decisions that can lead their investment that is locked to decrease in price. Someone buying their vote is already too hard. Another solution is to lock XTZ for more time.

For instance if someone wanted to buy my vote, when I’m risking 90,000 XTZ with only 30,000 liquid XTZ to sell immediately, well he would have to offer me quite a lot to be able to buy my vote.

We never had a vote buying scandal since genesis block, this is because bakers are already vote-buying-resistant because they have a skin in the game that they are risking.

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It’s a terrible idea to allow non-bakers to vote. Bakers lock up their tez, risk being slashed and commit to use hardware to support the network. Stakers press a button in a wallet.

Every problem that “allowing stakers to vote” solves is more easily solved by just moving to a baker that supports the staker’s goals. This has the benefit of greasing the wheels of governance and encouraging debate in public. If we allow stakers to vote, we will have fewer bakers and governance decisions will be made behind closed doors essentially as the governance IQ of Tezos populace drops lower and lower.

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Delegators can either choose another baker that vote according to their philosophy OR associate to create their own baker DAO, to represent themselves in the on-chain governance and receive the full rewards, but also they will have to put those XTZ in bonds like us, which is fine, because we are all playing the same game, and a Baker DAO will be contributing to the Tezos network by increasing the amount of baker nodes.

What we can’t allow, and I will always vote against any proposal that seeks to destroy bakers incentives to run a baker node, is to allow non-baker entities to vote. It is suicidal, bakers that vote for this will self-sacrifice themselves, this is altruism (the morality of self-sacrifice), is against rational self-interest of bakers.

And is not only about the risk of being slashed… that’s another thing, but is the risk that we have our TEZ locked in bonds and we cannnot sell, our TEZ is illiquid, if we make an irrational decision, and vote irrationally, then it could go to $0, and we still wouldn’t be able to unlock our TEZ. This is why, bakers make rational decisions, because they vote according to their self-rational interest, and that is why our rational decisions benefits EVERYONE not just us. And this is why we can’t allow non-baker entities to vote, is suicidal.

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Does Véronique Cortier, Pierrick Gaudry, and Stéphane Glondu run their own bakeries?

Speaking of vote buying, if delegators are given rights to cast their own votes, in that case I will offer two fees, one at a discount for delegators that wish to renounce their voting rights and instead delegate it to me, aka vote buying. And a higher fee for the ones that want to be able to cast their vote themselves.

It is just a terrible idea, delegators don’t care about governance voting, they only care about using dapps and receiving their rewards from delegates, now they will have to have the obligation to participate in the governance, and will make the user experience worse, they will end up being lazy and selling their votes instead to the baker who offer the biggest discounts…

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You act as if bakers are the only stakeholders in this network and non bakers are incompetent.

For me it makes total sense to be able to override baker votes. There is always rigidity on finding another baker and you don t always know upfront how bakers will behave.

If as a baker you don t trust your users, you may be mining the wrong network. By the way: as you re aware bakers are also users and the whole governance system has been set up to avoid bad decisions (cfr super majority)

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there has to be some kind of lock then.
as a non-baker you don’t risk anything so you can vote for BS and sell right away

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What do you mean you don’t risk anything? You can only vote when you have skin in the game (stake). If you hold 1m usd of xtz to vote you bet you will vote so it will benefit the network.

On the other hand- how do you protect against baker only interests (eg a proposal to increase inflation to 20%)? When you can override your baker s vote that becomes much easier

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Agree, they must share the risk, and not only locking, we as bakers also have the risk of being slashed. In that case, delegators should also lock their TEZ for more time than bakers because they do not risk of being slashed.

But, it doesn’t make sense for delegators to lock their TEZ just so they can gain voting rights, they want to have liquid TEZ, so they can use it in dapps or simply for wealth transfer.

There is a reason why tezos was designed this way, LPOS is about delegators having liquid TEZ, so they can be free and use dapps and still receive rewards from delegates… Now instead of Liquid PoS it will be Bonded PoS?

I’m 100% sure that 95% of the people will not time lock their TEZ, and sacrifice their liquidity and not being able to use their TEZ in yield farming dapps or any other kind of dapp.

That’s why, there are multiple reasons we handed the voting power exclusively to delegates and not to delegators.

  1. Delegates research/investigate for delegators, which are the best governance objective, rational decisions because they have TEZ locked in bonds and at risk, we have the best intentions to vote objectively. In exchange they can have liquid TEZ.

  2. Keeping it simple for delegators, right now they only need to.

  • Buy Tezos
  • Click a button to delegate to baker
  • Enjoy rewards without any of the risks
  • Use dapps, or use TEZ to wealth transfer.

Now you guys want to add them another duty to delegators (and without any of the risks) of participating in the on-chain governance, why complicating them more, adding more duties to dapp users? Right now is a paradise for them, they don’t have to do anything, just the 4 things I mentioned above. And by complicating it more to them, they will compromise us, the bakers, if they make irrational decisions, we have to suffer the consequences, they can just move their TEZ to exchanges and sell, we can’t.

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I mean you can vote and sell because you don’t have your tez locked

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Risk of being slashed has nothing to do with it, don’t screw up and you’re not gonna be slashed

I have that risk, and they don’t. The concept of “fair” here in tezos is to share the same risks. Period.

Besides, nobody will time lock their TEZ, Participation will be low, they will rather delegate, so their TEZ remains liquid, so they can use dapps.

It doesn’t make sense for delegators to override baker votes.

  1. If no lock time is required for delegators, then less incentives to run a baker.

  2. If they are required to lock their TEZ, then nobody will do it, because they will rather have their TEZ liquid for dapp usage = low participation.

Why changing the status quo if it has worked great so far?

On the other hand- how do you protect against baker only interests (eg a proposal to increase inflation to 20%)? When you can override your baker s vote that becomes much easier

Bakers have all the incentives to make rational decisions, the interests of bakers are ALIGNED with delegators. There are no conflict of interests. A proposal to increase inflation to 20% will affect BOTH, since bakers have TEZ locked in bonds. There aren’t misaligned interests, that is a lie.

The only situation in which there can be misaligned interest, is if validators are not required to own coin collateral/bonds, like in EOS or other DPOS. This is not the case for Tezos, here validators are required to own collateral locked in bonds to operate, whatever decision we make is aligned with delegators who also own TEZ.

You think we will let our TEZ locked in bonds to go to $0? We have to carefully think which will be the consequences of our actions, because our TEZ is ILLIQUID and letting delegators override our vote is suicidal because then it becomes more risky for us to have the TEZ locked in bonds thus fewer incentives to run a bakery, bakers will leave because of this, it will centralize baking.

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In that case, we need a switch which lets each baker voluntarily determine if he or she can be overruled by his or her stakers. Not to enforce that policy by law to ALL bakers who do not agree with having that policy.

Bakers with the switch off that do not wish to be overruled by its delegators and bakers who do not care to be overruled by its delegators shall compete in the market with the baker fee.

But do not regulate and enforce, so we all bakers are forced to adopt these altruistic policies.

Allow non-baker to vote. The delegation process used for baking is not necessarily the same
as the one for voting. It is not because one trusts some entity to bake on one’s behalf, that one
trusts it for voting on an amendment of the protocol (that could for instance give advantages to
delegates).

Why is this needed? The system that we have now has proven to work for voting in new protocols. Delegators can change their opinion at any time if they don’t agree with their bakers choice.

If you reduce the benefits of bakers, there will be less bakers to choose from, which will result in less choices for the delegators in terms of picking a baker that fits their needs (Payout stability/fee etc.) Running a baker is not a riskless, nor easy task in the first place. There is absolutely no reason to make it less attractive to bake on Tezos.

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From the responses it seems many has not read the report :sweat_smile: It deals mostly with technical details of how to implement vote secrecy with an option of allowing non-bakers to vote.

The paper is technically sophisticated and solid afaict! Fantastic work :muscle::tada:

My two cents:

Having vote secrecy seems important, but it goes a bit hand on hand with allowing non-bakers to vote. If the vote is secret and non-bakers cannot vote, how will they know which baker to support?

Bakers and non-bakers both have stake in the chain. And their interests may not always be aligned. Having users flee from the chain (e.g. from a vote that benefits bakers and hurts users) would also hurt Tez value.

Non-bakers are rarely into amendment details, and will in most cases default their vote to their baker. This is an important default and should remain - as pr. the proposal.

Baker do not lock up all their tez, unless their are at full capacity. Checking stats for a known baker atm it seems 160/225k is spendable. This will vary.

I would still agree that bakers have higher stake in the chain than non-bakers.

Questions:

Would it be an option to have baker votes count more than non-baker votes? :thinking:

Would it be more appropriate to lower the roll size? Still let only bakers vote, but more non-bakers can bake? :woman_cook:

Then is not objective to allow vote secrecy either, you just answered why we can’t have vote secrecy, giving non-bakers voting rights would result in a decrease of incentives to run a baker.

This is a classic Marxist mindset of the class struggle. That there is a “supposed” misalignment of interests between the two, marxist metaphysics says that we are in an eternal conflict, that’s how they view reality, but there isn’t any class struggle. We both want TEZ to go to the moon. Why we would do anything that could impact negatively to non-bakers/delegators/dapp users? It would be self-destructive for us as well.

For instance, a baker receives the full baking rewards from blocks, they choose to distribute 90% of the rewards (assuming 10% fee) to non-bakers.

A conflict of interests would be if bakers charged an exorbitant 50% or 100% fee, then nobody would delegate to those bakers. Bakers fee market fixes this already. Bakers would be victims of their own irrationality, market would simply boycott them.

So what kind of conflict of interest are you talking? Obviously can’t be rewards. In my view of reality, our interests are very much aligned. After all we have a bunch of XTZ locked in bonds, and thus we are the most interested party to see the price of those coins go to the moon. I actually think non-bakers should be interested in keeping incentives of validators high, the higher they are, the more people will be attracted to run a validator node, more decentralization.

Yes.
:bread: :baguette_bread: :stuffed_flatbread:

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